Google new Nexus One smartphone, which retails for $529 without a service plan, is built from components that cost about $174, according to a research report.

With its new Nexus One, Google has taken many of the latest smart-phone innovations and combined them in a single product that manages to be both cutting edge and cost competitive, according to a teardown conducted by iSuppli Corp.

The Nexus One, sold with the Google brand name but manufactured by HTC Corp., carries a Bill Of Materials (BOM) of $174.15, based on a preliminary estimate from iSuppli's Teardown Analysis Team. This total comprises only hardware and component costs for the Nexus One itself and does not take into consideration other expenses such as manufacturing, software, box contents, accessories and royalties.

Google is selling unlocked versions of the Nexus One at an unsubsidized price of $529, or at $179 with a two-year service contract from T-Mobile.

"With the Nexus One, Google has taken the most advanced features seen in recent smart phone designs and wrapped them up into a single sleek design," said Kevin Keller, senior analyst, competitive analysis, for iSuppli. "Items like the durable unibody construction, the blazingly fast Snapdragon baseband processor and the bright and sharp Active-Matrix Organic Light Emitting Diode (AM-OLED) display all have been seen in previous phones, but never before combined into a single design. This gives the Nexus One the most advanced features of any smart phone ever dissected by iSuppli's Teardown Analysis Service - a remarkable feat given the product's BOM is similar to comparable products introduced during the past year."

At the heart of the Nexus One is Qualcomm Inc.'s Snapdragon baseband processor that sports an 1GHz clock speed.

"The Snapdragon was first noted in a previous smart phone torn down by iSuppli?the Toshiba Corp. TGO1, which is based on Microsoft Corp.'s Windows Mobile operating system," Keller said. "However, the Android 2.1 operating system used in the Nexus One better capitalizes on the Snapdragon's fast performance, making the user interface and applications run very quickly.

This processing muscle also gives the Nexus One some advanced capabilities, most notably high-definition 720p video playback."

iSuppli estimates the cost of the Snapdragon at $30.50, making it the most expensive single component in the Nexus One. With the inclusion of the Snapdragon and the associated power-management and Radio Frequency (RF) transceiver chips, Qualcomm commands 20.4 percent of the Nexus One's BOM, giving it the biggest dollar share of any component supplier in the design.

One of the Nexus One's signature features is its 3.7-inch AM-OLED display, which is superior to the conventional LCDs used in most smart phone designs in a variety of ways. Compared to LCDs, AM-OLEDs deliver a larger color gamut, a faster response time, a thinner form factor and reduced power consumption.

Prior to the Nexus One, AM-OLED technology appeared in another smart phone, Samsung?s I7500, which features a 3.2-inch display. However, the Nexus One uses a larger display, marking the first use of a 3.7-inch OLED that iSuppli's Teardown Analysis Service has seen.

"The 3.7-inch AM-OLED display on the Nexus One delivers a stunning picture," Keller said.

With an estimated cost of $23.70, the AM-OLED display is supplied by Samsung Mobile Display Co Ltd.

The Nexus One also sports a unibody design, which means that the smart phone's enclosure comprises a single part. Such a design approach provides greater structural rigidity, providing more protection to the internal electronics in case the phone is dropped. On the other hand, a unibody tends to drive up manufacturing costs. Besides Apple Inc.'s iPhone, this marks the first unibody smart-phone design that iSuppli's teardown analysis team has noted.

With the Nexus One, HTC has taken a major cue from Apple in the enclosure design, making it the most "Apple-like" product yet seen from any in the competition, and others are likely to follow suit.

The Nexus One also features a dual microphone design used for cancellation of background noise. This feature also was noted in Motorola?s Droid, another Android-based smart phone. To implement the noise cancellation function, the Nexus One employs a specialized audio voice processor chip from Audience Semiconductor, the first time iSuppli's Teardown Analysis service has observed a part from this manufacturer in any electronic product.

The Nexus One includes a large quantity of DRAM, employing 4Gbit (512MByte) of Samsung Semiconductor?s Double Data Rate (DDR) DRAM. This compares to 1Gbit or 2Gbit for comparable smart phones. The large quantity of DRAM is required to store executable code to support the fast performance of the Snapdragon processor, and allows for better application performance.

While the Nexus One features 4Gbit of internal NAND flash memory, the same amount as the Droid and the Toshiba TG01, it is bundled with a comparatively small MicroSD card of 4Gbyte. NAND flash is used for storage of user content and media on the smart phone. The Droid and TG01 are supplied with 16Gbyte and 8Gbyte, respectively. This allows Google to keep its overall BOM costs down, yet still allows the user to upgrade as needed. And while the 4Gbyte of internal flash pales against the iPhone's whopping 16Gbyte, it has the advantage of expandability afforded by the MicroSD card slot where the iPhone has no external storage facility.

Samsung Semiconductor is the supplier of all the memory in the Nexus One, giving it $20.40, or 11.7 percent, of the product?s total BOM.

Other notable design winners in the Nexus One include Synaptics Inc., which supplies the phone's capacitive touch-screen assembly. iSuppli estimates the cost of the assembly at $17.50, or 10 percent of the total BOM. While the module and the Android operating system support multitouch input, the capability is deactivated on the Nexus One.